Good Marketing, Good Business

009: Presenting Payment Plans The Right Way

September 10, 2023 • Shannon Stone • Episode 9

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Ever had the perfect prospect, who was more than willing to buy your service but reluctantly said no because they couldn’t meet the investment commitments?

This isn’t about making people with no money pay you for your services, it’s about creating the right kind of flexibility to allow ideal clients and prospects to sign up to work with you. 

By listening [and taking notes], you’ll learn:

  • The range of ways to take payments from your prospects
  • How structured flexibility can increase your conversions and rewards
  • The right way to do payment plans so you still get paid and reduce risks

Payment plans help both you and your future clients in ways you likely didn’t expect - listen in as this episode is well worth your time.

Enjoy!

Resources:


If you’d like to work together with me as your 1:1 business and marketing consultant, book a call here.

Shannon Stone:

Hey guys, welcome to the podcast. Today we're talking about payment plans and how they can actually work in your business. How can we do it in a way where there is less risk and more reward? We can actually achieve those things. So grab your pen and papers handy, have them with you. You want to be taking notes very quickly before we jump in.

Shannon Stone:

I wanted to share a few things. The first is that we're already making improvements to these episodes. So the first is that we are adding action steps to the very end. This will help you to turn this information into more practical steps. So if you know me, you know I'm really passionate about that. So the action steps will be at the end. If you do check out the transcript, that would be a great section to jump to as well Helps you to make sure that you turn these ideas into something in your business. So that was the first thing I wanted to share. The second thing I wanted to share is that the podcast made it to the top 10 in two categories. So in business and in marketing. I feel like my university lecturers would be proud, so I wanted to say a big thank you if you've listened, if you've rated, if you've reviewed. Any of those helps to push the podcast up in the charts and that helps it to get seen by more people. So keep listening and if you haven't rated or reviewed, please do so. It takes two seconds and it you know, it helps the podcast to be seen and help more people. These small but mighty actions that do make a difference. Okay, and the last thing I wanted to share with you is that several people have said Shannon, you haven't told us how we can work with you, and I really appreciate that.

Shannon Stone:

It's not the reason for me doing these podcasts. As much as you know, I'm a business as much as anyone else as a business. I think that's one of the reasons my clients love working with me is that I go through a lot of the same things, or I've been through a lot of the same things that I then advise them about. But if you were interested in working together or seeing if I can help you, in the description there is a link to book a call. If you can't find it, send me a message on any of the social media platforms and I can send it over to you. But I am a business and marketing consultant. I work one-on-one with service-based businesses only, and there's only so many businesses that I can work with, since I do work with them one-on-one. So if you want help to make more sales, expand your team and better manage your small business, then they're the type of things that I help people with. Feel free to check it out if you are interested in booking a call, and thank you to those who are looking out of like shun and get those calls to actions in there. So I appreciate that.

Shannon Stone:

Okay, let's jump into today's episode. We're going to cover everything that you could possibly want to know about payment plans for your business. I actually did a quick search to see well, what is out there for payment plans to help businesses. And, my friend, there is not a lot, probably for the reason that I had to figure this out myself and I helped my clients with it and I thought it would be something great to share with you as well. But there isn't a lot of information out there. So I think what we're going to cover today is going to be really helpful more reason to share it along with other people, because they're probably wondering how they can do the same things as well.

Shannon Stone:

So if you deliver exceptional results to your clients, I would hate for the first step for them to move forward with you, which is making that investment in your services and paying you. I'd hate for that to be the sticking point for them to not go ahead and work with you. Just imagine having the perfect client or the perfect lead or prospect there on that call who are sending them a proposal and you know your solution is the solution they need to their problem. And the payment, or the ability to pay, is the reason they don't go ahead and work with you. And this is not about taking money from people who don't have it. This is not that at all. So today we'll go through how we can do this in a way where it serves both you and your future clients. So we'll talk about the different ways you can take payments, the different payment options. We'll talk about the risks, how to handle them, but also the rewards as well, because there are plenty of rewards by offering payment plans how you can have structured flexibility so it increases your conversions, and the right way to do payment plans so you still get paid.

Shannon Stone:

Payment plans done the right way, allow people who are the perfect fit for your services to get started today and thus avoid waiting, avoid missing out, avoid delaying results and to end the suffering that they're experiencing and, worst case scenario, going off and finding someone cheaper who doesn't deliver the way that you deliver. So payment plans can not only work in your favor, it can work in your client's favor as well. So we're going to jump into it. There are seven different things we're going to go through today when it comes to payment plans. We're literally going to unbox, unravel and deep dive into all of it.

Shannon Stone:

So we're talking about payment options, way people can pay you. The first and most obvious one is paying you in full. There's two main ways I find people can pay and we can present those offers to people. There's two options you can pay in full or you can do a payment plan, and I find they're the most ideal options. But we will talk about all the other options that can increase your conversions and we'll talk about how we can eliminate the risk as well. So with the first one being paying in full, when people pay in full, you've got the option to give them an incentive to save. So generally, I advise doing a 10% saving if people pay in full. So that's really clean, that's really simple, not much to go in there. The second option being a payment plan, and a payment plan over the term of your services. So say, you work with people for three months, the payment plan is over three months and they would probably pay the full amount without that 10% saving. So those two options are really simple, really clean. It's like to work together. It's $5,000 for three months, or if you do a pay in full, it's $4,500. That's round about a 10% saving. So that's really simple to offer to people.

Shannon Stone:

But what happens when they can't do those payment plans or those payment options? This is where the third step comes in and this is where you can take a deposit If someone wants to go ahead and work with you, but also they don't have the urgency to start as well. So this is not just about because they can't fulfill the payment plan. This could be for other reasons as well. Someone wants to go ahead with you, but they want to start in a month or in three months or whatever it might be. Always take a deposit today and then the remainder of the payments. So say, the deposit is $1,000, then they've got 4,000 left to pay. Ask them, will they be paying that in full or will that be a payment plan? And what would that look like? So that $4,000 is either paid in full, because they've already paid the $1,000 deposit today, or they're doing the $4,000 as a payment plan over the term of how long you're working together, say the three months. So you would split the $4,000 over those three months.

Shannon Stone:

So that's where deposits come in, and deposits can be really great because it holds people accountable to working with you. So you can have the perfect prospect, the perfect offer, the perfect solution there for them to solve that problem. They're really keen to get started, but they also don't have the urgency. Christmas is happening and I'd love to start in the new year. So let's chat about it then. We're not gonna chat about it then? We're gonna make a commitment now. We're gonna put a deposit down now, and you're not gonna use these firm words, of course, but I'm just saying this to you so you can find the ways to apply it in your business. We make a deposit now to then start in the new year if that were to be the case. So deposits are great because it stops people from disappearing altogether, holds everyone accountable that you will be working with them to solve their problem. So that's a third way.

Shannon Stone:

Deposits Now, the fourth way, and you're definitely needing your pen and paper and full attention for this one, because this is where things can get a little bit tricky. So an extended payment plan. So what happens when you've got the perfect prospect on that call who wants to work with you? They can see you've got the perfect offer, but they can't meet the payment plan. They definitely can't pay in full and they also can't pay the monthly payments over the three months.

Shannon Stone:

Could you offer an extended payment plan Now? When I say extended payment plan, something that goes beyond the time that you work together Now, you do have to be really selective in who you extend this to, and this is something that you can come to a conclusion about. But I find people who work in high touch, high service-based industries. The reward is so much greater than the risk. So, offering an extended payment plan to someone that you are speaking to once a week, twice a week, multiple times, multiple times a month, someone you're in close proximity with because of the nature of your work, the risk is so small in comparison to the reward by offering an extended payment plan to people but I did wanna just raise that with you you can be selective in the scenarios for the people that you choose to extend this invitation to, where they can take up this payment plan option with you. So with this it's about being more flexible and splitting the payments over an agreed and feasible timeline.

Shannon Stone:

So say, you've got that person and they really wanna go ahead, but they can't meet that the initial payment plan option I would always ask them what type of payment plan would suit you if we were to spread out the payments further? So instead of you saying, well, let's do a six-month payment plan and make it and split the payments over those six months, they may just need an extra month to meet the criteria for the payment plan. So I would always encourage that you gauge with them the prospects. If we were to do a payment plan, what would suit you if we spread these payments out to reduce the monthly amount? What would work for you rather than you suggesting let's do it over six months, because they may well be thinking I just need it down a little bit more and I can pay it over four months and that's great for you because it reduces your risk as the business owner For someone being in a payment plan, because there is always that reality there.

Shannon Stone:

So if that person is to go into, say, a four-month payment plan, there's two options I would then do. Imagine you're on this sales call with them or you're sending them a proposal. They would make the first payment today from the payment plan. So the five thousand dollars divided by four, whatever that ends up being, that's what they would pay today. Or they would pay a deposit today to then get started.

Shannon Stone:

And if they paid the deposit today, I always this is the second thing I always gauge and ask people we'll have to do a deposit today, what would you feel comfortable with? And and ask them what that deposit amount would be, because you might say, well, the deposit is a thousand dollars, but they were actually willing to pay $2,000. This is reducing the risk when and it's also meeting them as well, and it also comes across that you're really working with them. So if you say to them We'll do a deposit today, what amount would work best for you? Or something to that effect Ask them about making a deposit. If they say more than a thousand, that's great. If they say less than a thousand, I would say, look, I don't do deposits any less than a thousand dollars. Would you be able to do that today? So you'd have to work with them around that deposit. But you can bring people up to where you need that deposit to be, because for a package of $5,000 I wouldn't be making a deposit of a hundred dollars. It's just not Significant enough for someone to be fully committed to it.

Shannon Stone:

So the extended payment plan option you can be selective in how you Allow people into this. I would be asking people, if we were to do a payment plan, what timeline would work for you? Or if we were to split the payments across a longer period of time, what would that look like for you what would work best for you. So work with them to get to a practical extended payment plan conclusion. So if we pause here for a minute what these payment plans do Whether you do the monthly or the extended payment plan over a longer period of time, it allows people who would be a perfect fit for your services to get started today and it avoids them waiting, missing out, delaying results, suffering in their problem and even going away to someone else. I've seen it happen time and time again where, if you just add that little bit of flexibility, your conversions increase and more people will want to work with you and the reward is so much greater than the risk.

Shannon Stone:

Okay, so that's number four, the extended payment plan. So the first one was paying full. Second was payment plan over the term of the project. So if you work with them for three months, they pay over three months. The third was the deposit. So getting people to make a deposit and then starting when they're ready to, or whatever that may look like Could be because you're too busy. You want them to make a deposit and then start when you've got that availability in your schedule.

Shannon Stone:

Number four is the extended payment plan. There's a lot of nuances there, but it can be a great option to increase your conversions and just offer a little bit of flexibility In line with not just them but also you as the business owner. Remember, you get to make the decision of how you want to run your business, what flexibility that you add in and if you're happy to open up the possible risk to increase the reward. Okay, number five you can do an invitation for people to leave their payment plan early. So this can be something where, say, you've got people in a payment plan and this could be where you do it in like one foul swoop to everyone, to all your clients who are on payment plans. You could go to them and say, look, just wanted to see if you wanted to clear off this payment plan and get it out of the way, or you could do it after a certain time period. So maybe you've got people in payment plans for two months and then you say to them Did you want to clear out the final few payments early? That can be really great for a lot of people because they don't want it hanging over them. You as a business owner may not want it hanging over you as well, and if you want to. You could also add an incentive for people Finishing off their payment plan early, one incentive that would make sense if your pay in full amount was a 10% saving, you could extend that saving to them because you've already factored that in Into your profit margins and things like that. So asking people if they do want to clear up the payment plan early is a great step you can do.

Shannon Stone:

Number six is a really important one. So when you want to continue working with these clients so say in the scenario that you have a three month package and the way that you work is very retainer style, or you want to work with them ongoing and vice versa that client also wants to work with you ongoing we want to be careful, especially the people on payment plans or extended payment plans. I should say we want to be careful about stacking payment plans. So say, that person came on to your three month package but they ended up going on to a extended payment plan of six months, and then the first three months is up and they want to keep working with you, but they still need to be on an extended payment plan. What do you do in this situation?

Shannon Stone:

This is where we have to be really careful about avoiding stacking payments, because I would hate to add two layers of a payment plan that they couldn't afford, so increasing those amounts too high, because Are they going to be able to fulfill that payment plan? What's going to happen there? So we do have to be careful with two things One is the money, the amount that people are paying, and then, second, the length of time those payment plans are. Because what someone might do is well, I'll just add that payment plan onto the end of the six months and then, all of a sudden, they work with you for three months on a six month payment plan. They want to work with you for another three months and then you add on another six month payment plan, so all of a sudden, they're working with you for six months and they're on a 12 month payment plan. How is that going to feel for you? I think it can create a lot of potential risk because there's so much time far out in the future. If you feel comfortable doing it, do it. If you don't feel comfortable doing it, then don't do it.

Shannon Stone:

But you have to explore all the scenarios of what can happen, because it's not just about getting that person in the door to begin with and offering them a really long payment plan of six months or 12 months from the get go. Because what happens if they want to continue working with you? What does that look like? So avoid stacking payment plans. And so that would be a great opportunity to say to that person would you like to close out that initial payment plan early and then we can start at this date? Maybe and so you explore all the different scenarios Maybe they do the three months with you. They're still on a six month payment plan. Would they be able to pay out that remainder of that payment plan and then start the next series of three months with you? Where would this all look? What would this look like to make sense? So you have to explore all the different scenarios.

Shannon Stone:

I have had situations where I've seen my clients and their clients. Someone will just come on to work with them for three or six months. They'll be in extended payment plan. They'll just work with them one time and that's perfectly okay as well. They don't have to work with you forever if that's the service they want from you. So just explore what these options could look like in the scenarios where someone comes on as a payment plan, but then they want to continue working with you. How would you propose that you move forward with that in that situation? Okay, that's number six. When someone wants to continue working with you and avoid stacking those payment plans. Number seven is the last one we're gonna jump into before getting into the action steps. So number seven is the riskiest of them all and that is what happens if someone doesn't pay.

Shannon Stone:

So there's two scenarios for this. If someone doesn't pay or they're struggling to pay and we have to address this if we're talking about payment plans, I do believe there's so much more reward in doing payment plans than there is risk, and for that reason it's worth doing payment plans. But we have to have the full conversation to understand worst case scenarios and what can go wrong, so that we know what we would do in these situations and so we can course correct before it even gets to that point. So if someone doesn't pay, there are two scenarios. One you're still working with them. The second scenario is you're not still working with them. So in the case of someone works with you for three months but they're on a six month payment plan, what if in month five they didn't pay and in month six they didn't pay. So they've got two payments they've missed. They've done month one, two, three and four, but then they're not working with you when they miss the last two payments, whatever it may be. So there's two scenarios that happen here you either working with them or you're not working with them.

Shannon Stone:

So either way, you always want to find out if everything's okay. So don't go to worst case scenarios in their world of like they're not gonna pay, they haven't paid, they're running away, they're ghosting me, like all those things. Find out if everything's okay first. Let's not be so dramatic. Find out if everything's okay and then find out when they'll pay. Really, really simple. Something small could have happened. They could have forgotten, maybe they had to transfer money to a different account and they didn't do it in time, or the bank card expired.

Shannon Stone:

Just assume positive intent. First, find out if everything's okay, be a caring person. You're a service provider, be of service. And then find out when they'll pay, rather than jumping to any kind of conclusions. That could just feel really funky. So find out when they'll pay Now. They might just come back to you and say, oh yeah, this happened, I'll pay, no worries or sorry, this thing happened, am I able to pay by the end of the week. I'm sure you're happy to extend that level of flexibility. But if there was anything more disastrous, anything more where it's starting to impact you now and your cash flow, it can be really tricky here. But this is where I would deploy a level of flexibility that made sense.

Shannon Stone:

So if someone in the case where they were on that six-month payment plan and they missed payment number five, I'd find out if they're okay when they'll pay but say they can't pay or something's happened, I would say well, can you make this amount today and we can update the rest of the payment plan to be more flexible. Maybe they just need to reduce those payments a little bit. So we're not doing anything at all, we're not letting them pay, we're not skipping over it. Can they make a partial payment today and I think that's in good faith and then reset the payment plan of what the rest of it needs to look like? Or maybe it's just this month's payment, that month five? They just need a bit more flexibility. They can pay half today and half next week, for example, and then next month they'll pay that final payment and everything will be all good. So get onto things as they happen really quickly.

Shannon Stone:

Do assume positive intent, offer the option of making a partial payment today if you need to offer that flexibility. And, worst case scenario, if you need to create a new payment plan because something's happened in their world or they can't maintain it or whatever it may be, you can set that up. But I would always set it up with a structure. You always need a structure to your payment plans. Even if they're paying a really small amount, don't take anything like oh, I'll pay next week, what day are you going to pay next week, or can I change the amount? You have to add some certainty and structure to this, in the amounts and when they're paying. So if they need to split those final two payments in half, write down into an email a structure of what that looks like, how much they're paying, when each payment is due and what that looks like If it's a direct deposit it'll be coming out that way or how they're going to pay. You Do you issue an invoice every single time? What does all of that look like? So it's all there, it's all structured.

Shannon Stone:

So, whether you're working with them or not, the process is find out if everything's okay, when they'll pay and then, if you need to be flexible, what would that look like? Can they do a partial payment now? Can they pay some now, some next week? What's the date they're paying? And do you need to recreate a new payment plan for them? Don't take anything, as things are really hard. I'll pay when I can. We're not doing that. We're putting a structure, we're putting amounts and we're putting dates in place. So that's what to do.

Shannon Stone:

If someone doesn't pay, you bring them back to the payment plan, you hold them in integrity for that and you put those things in place. So there is a structure there. The worst case scenario is someone just doesn't pay, period. If you're still working with them, you wouldn't know if they're not going to pay into the future. We just don't know.

Shannon Stone:

But there's always a point where, if you're still working with them, can you cease or pause services until their payments are up to speed. Because worst case scenario is you continued working with them but they stopped paying. But you were going off the word that yeah, yeah, yeah, I'm going to pay, they're going to pay, that kind of thing. You're hearing a lot of this dialogue. The accounts person will pay. You're hearing this, but payment is just not coming and you continue your services with them and then the worst case is a few months go by, you did all this work and they never paid. You deserve to be paid for your services.

Shannon Stone:

So if you need to pause your services, cease your services until they actually come up to speed and pay. That's what I would put in place, because the flip side is you go on, you work with them for months and months, do all of this work. You're still not paying. Now what do you do? Are you using a third party service to chase them for those payments? Are you contacting? Like, what are you doing there? It's just going to open up a whole can of worms. So if you can jump onto these type of things as quickly as possible before it becomes a bigger issue, it's going to save you. It's also going to save them as well. So extending a little bit of flexibility can help both of you. It's like they just couldn't pay this week, but they can pay next week. Well, that's fine. We're actually not deterred, we're still on track. It's perfectly good. That's what I would do if someone doesn't pay.

Shannon Stone:

So obviously, as we start to wrap this up and get to the action steps, there are risk in payment plans. It's just what it is. A few things I would consider or keep in mind is keeping the monthly amount people pay feasible. You don't want to be stacking payment plans. You don't want to make them astronomical. We don't want to put people in financial stress. So where can we reduce the monthly amount so it makes sense for the two of you? And where can you also reduce the timeline of how long they're paying? Something over 12 months is going to have more risk than something over six months, so can you reduce that timeline and you will find there's so much more upside to doing payment plans than there is a negative. But we do have to explore what are all the risks? What would happen if someone doesn't pay? What would happen if they do want to continue working with us but they need to be on a payment plan again? We have to explore all of this because it'll save us in future if and when that happens.

Shannon Stone:

The last thing I wanted to share with you guys is what is the difference between someone who pays in full and goes on a payment plan, or when there are little things that happen around people paying on a payment plan. So I believe that we have to remove all these money stories or the stories that we tell ourselves about the money and the people and someone who's paying in full must be really rich and someone who's on a payment plan, like. If we come up with all of these things, it just takes our attention away from where it needs to be and your attention needs to be on the work that you do. So if someone is on a payment plan, it says nothing about that type of person and the work that you should do with them and all those kind of things. And if someone were to be late on paying you or something came up like the worst case scenarios, it's not a reflection of the work that you do. If you're working with someone actively or in sessions with them or working on that project and they were late on an invoice, it's not because they don't like your work, it's not because they don't like you. We can't tell the stories and come to conclusions around these things because it just takes our focus away from where it needs to be. So at the beginning I said if you help people get exceptional results, you're an exceptional service provider and you come across people, the leads, who are the perfect leads the perfect prospects. You've got the most ideal solution for that. Focus on that. These payment options are just ways to help those perfect people get started with us. So focus on your work and let's ditch any stories that might come up. Ok, let's get to the action steps. So I've got five action steps for you to drive this conversation home today. The first is that I want you to review in your current business, what are the payment options people have with you at the moment. Do you have payment plans? Do you have paid and full? Do you have due due deposits and you'll start in a month's time what do you have already in place? And then, what have you learned from today that you can go in and integrate into your business?

Shannon Stone:

I remember the first time someone paid me in full for my services. It was several years ago and it was the beginning of me learning all about these payment options and these payment structures. I think, like I mentioned, it's why a lot of my clients love working together, because I am a business owner. I've had two marketing businesses, so I know what it's like to be them, and I had a client who I signed him up and I told him the price and he said, oh, could I just pay in full and then I'll just get it out of the way? And up until then I had never even thought about someone paying in full for these services, like this lump sum. That's not what I said to him. I said, of course you can pay in full, that's perfectly fine. And so from that point forward, I always offered two options a pay in full and a payment plan, with investment. Saving on the pay in full as a nice gesture reduces all the admin and all that kind of thing. So you do need to review what have you got in place at the moment and what's anything new that you're going to add in.

Shannon Stone:

The second thing to do is to go back to any past leads and prospects who were a great fit for you, but they didn't go ahead because of the payment issues or I don't want to say issues, but they didn't go ahead because of the payment situation. Go back to them and say, hey, I've been thinking of you, I know my services can really help you and I'd love to have a chat, as I've now introduced a payment plan. It might be a good fit for you. So go back to anyone who's inquired who you know would be a great fit, and tell them you've been thinking of them, how your services can really help them, and that you've introduced a payment plan. You'd love to have a chat. That's number two. Number three is if you've got anyone on a payment plan at the moment, would you like those people to pay now? Do you want to invite them to finish that payment plan early and do you want to do an incentive? This can honestly be a whole separate conversation around cash flow hacks, but it can be a great way if you need to boost up your cash flow a little bit.

Shannon Stone:

Leads aren't coming in. If you've got people on payment plans, ask them do they want to pay that out early? Obviously, the downside is you won't have that cash flow in the future. You know those monthly payments coming in if they're paying it early now. So number three invite anyone on the payment plan to finish up that payment plan early. Number four is anyone who hasn't paid you and I don't care how long ago it was a year ago, two years ago, however long ago it may have been go back to these people and set up a structured payment plan and whatever it needs to look like in order for them to complete that payment plan and to completely pay you for your services. Go back and get that done. Set up a structured payment plan in a way that would work for them. What are the amounts? What's the timeline? It's better than not being paid at all. If you have to make it really small, small monthly payments over a really long timeline, it's better than not chasing them up at all.

Shannon Stone:

You deserve to be paid for your services, and the last action step that you can take is and this is by choice if you want to do this one, you can take it to your marketing and tell people that you've now introduced a payment plan. You can tell people what this looks like, or you can tell people to book a call if they're interested. You can talk them through those payment plans or the multiple payment plan options. Depends on how you run your business, how you do your marketing. Are your prices out there? Do you want to tell people what the payment plans are or is that something reserved for the call? But you can take it to your marketing that you've introduced a payment plan and you want to share that with people. Call to action, book a call, see how you can help. Ok, so that is everything. That is everything we wanted to cover today to help you to create payment plans that actually work, that increase the reward, that reduce the risk.

Shannon Stone:

Hopefully you found it useful. If you have any questions, always reach out and definitely share this episode with someone who needs it. I know I definitely would have loved it many years ago when I was fumbling around and figuring all this out myself, so hopefully you can do that person a favor and help out a business bestie. I will leave it at that for today. I hope you found this useful and we will chat very soon.

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